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Child tax credit in governor's budget draws strong support from advocacy groups
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Summary
Advocates told the House Finance Committee that converting the dependent exemption into a refundable child tax credit would deliver immediate benefits to low- and moderate-income families, while the administration said the credit is estimated at about $325 per child in FY27.
The House Finance Committee heard broad public support for the governor's proposal to replace the dependent exemption for children under 18 with a fully refundable child tax credit.
Sharon, presenting the budget office summary, said the proposed credit would be calculated using the current top rate and is estimated at about $325 per child for fiscal 2027. "The credit being proposed is calculated at the current top rate ... and is estimated to be about $325 for fiscal 27," she said.
Advocates from child- and family-focused organizations said the credit would target families who currently do not benefit from exemptions because they owe too little tax to use them. Darlene Allen of the Rhode Island Coalition for Children and Families told the committee the refundable credit would "put flexible resources directly in families' hands" and help offset risks from federal program changes.
Multiple public-health and anti-poverty witnesses cited federal evidence that expanded child tax credits reduced child poverty and improved food security; public-health witnesses framed the credit as preventive investment in children's health and development. The Economic Progress Institute and Rhode Island Kids Count urged a larger refundable credit or an expanded phase-in but supported the governor's baseline proposal as a start.
Administration representatives said the proposal would benefit about 110,000 filers and would cost the state an estimated $15 million in the current year, annualizing to about $30 million. Several committee members asked for distributional details and for data showing which income cohorts would see the largest benefits.
Supporters said the refundable design is the central feature, enabling low-income families with little or no tax liability to receive the full benefit. Opponents were fewer on this point but raised questions about phasing and indexing. The committee did not take a vote and requested written distributional analyses.
The committee asked staff to provide additional breakdowns of likely beneficiaries and scenarios for increased credit amounts; no final action was taken at the hearing.
